Morocco’s Lafarge Ciments H1 profit up six per cent

30 September 2004

Morocco’s leading cement firm, Lafarge Ciments, reported first-half net profit up 6 percent but said this growth should fall to zero by year-end as sales growth declines and due to a special tax on cement sales.

Turnover rose 4.2 percent to 1.44bn dirhams after 8.2 per cent growth in sales volumes, said the firm, controlled by conglomerate SNI and in which Lafarge is a main shareholder.

Net profit reached 377m dirhams ($42m), the company said in a statement.

Echoing comments by analysts, Lafarge said the building industry had seen since May a "strong slowdown" which worsened in July. "(It) should limit the annual growth of our sales to five percent (in volume) compared to the previous financial year," it said.

Such growth is not enough to fully cushion the "important impact" on the company’s results of a special tax on sales.

"We hope however that progress made on the productivity front would help up maintain results of 2004 at the level of those of 2003," Lafarge added.

Cement firms and the Moroccan government agreed last year to double to 100 dirhams per tonne a tax meant to generate new funds for the government’s efforts to eradicate shantytowns.

The construction sector in Morocco has been growing rapidly over the past two years, helped by housing projects for low-income families and development of infrastructure, mainly roads, hotels and a huge port near the northern city of Tangier.